Swedish heavy-vehicle makers Volvo and Scania on Friday said they were preparing to cut back production on lower demand as they reported third-quarter results.
Gothenburg-based Volvo reported a 37-per-cent drop in pre-tax income for the quarter, citing the economic downturn in key markets.
"It is the sharpest downturn we have seen in a quarter," Volvo chief executive Leif Johansson told a news conference, saying it was a "very difficult and dramatic quarter."
Pre-tax income was 2.89 billion kronor (370 million dollars), compared to 4.57 billion kronor in the corresponding period 2007 for the Volvo group, excluding the Ford-owned car division.
Net sales were up 2 per cent to 69.6 billion kronor, while net income fell 36 per cent to 2 billion kronor.
Rival Swedish heavy-vehicle and bus maker Scania said its pre-tax income was 2.5 billion kronor, up from 2.37 billion kronor in third- quarter 2007.
Scania sales increased from 19.9 billion to 20.43 billion kronor, the group said, noting that net income was also higher.
Scania chief executive Leif Ostling said "uncertainty about future business conditions" had contributed to a drop in order bookings in Europe including Russia, while bookings "remained strong in Latin America and Asia."
Scania was therefore planning to adjust its production. While Scania expected earnings to increase in 2008 it would not forecast the market for 2009, Ostling said in a statement.
During the quarter, Scania delivered 16,244 trucks and buses, about the same level as in the third quarter of 2007, while order bookings for trucks plunged 41 per cent year on year to 9,927 units.
Amid the slowdown in Europe, Scania said it aimed to expand sales in Asia and the Middle East, drawing on its facility in Dubai.
Volvo's CEO noted declines in Europe, "weak demand" in North America and Japan, and slower demand in other markets.
Operating income was 3.2 billion kronor, down 37 per cent on the corresponding business period 2007.
Volvo said it expected the European truck market to grow at most 5 per cent in 2008.
In North America, the market was estimated to decline by about 10 per cent compared with 2007.
During the quarter, the group delivered 56,243 trucks, down 2 per cent compared to the corresponding business quarter of 2007.
The bus division sold 2,119 units, up 7 per cent on the third quarter of 2007, Volvo said, adding that order bookings were up 14 per cent.
The group sells trucks and heavy vehicles, buses and construction machinery, and includes the divisions Volvo Aero and Volvo Penta.
The construction-machinery division was hit by higher steel prices, and lower activity in the housing and construction sector.
On the eve of the third-quarter report, Volvo said it planned to cut a further 850 jobs in the construction-machinery division in Sweden.
Shares fell 2.1 per cent Friday on the Seoul stock exchange on general recession fears. South Korea's won dropped against the dollar.
When the Spirit rover landed on Mars five years ago, no one expected it or its sister rover Opportunity to make it to their first birthdays, let alone their fifth.
Amelie Mauresmo fell victim to a leg injury after less than half an hour on court Friday to hand over a 4-0 victory which put French compatriot Marion Bartoli into the final of the Brisbane International.
Mumbai-based movie Slumdog Millionaire won five prizes Thursday night at the Critics Choice Awards, cementing its position as a surprise favourite just as the Oscar season moves into high gear.
After the Taipei Zoo received two giant pandas from China, another Taiwan zoo said Friday it is seeking to receive a pair of pandas from China.